- GBP / USD regained positive traction on Friday and rose again near the monthly high.
- The setup supports prospects for a move to test the 1.3565 confluence resistance.
- Only a sustained break below the 1.3400 mark will negate the positive near-term outlook.
The GBP / USD pair advanced during the first part of the European session and approached the highest level since November 10 reached yesterday, around the 1.3520 area.
From a technical perspective, a move above the 50% Fibonacci level of the 1.3834-1.3161 dip could be seen as a new trigger for bull traders. This, coupled with bullish technical indicators on the daily chart, supports the prospects for a further short-term appreciation move.
Therefore, a further move toward the next relevant hurdle test, around the 1.3565 confluence region, now seems like a different possibility. The mentioned obstacle comprises 61.8% of Fibo. level and the 100-day SMA, which if decisively exceeded should pave the way for additional gains.
On the other hand, yesterday’s swing low around the 1.3455-50 zone now appears to protect from an immediate drop. Any further decline could be seen as a buying opportunity near the 38.2% Fibo level and the 50 DMA of the break point of confluence resistance, around the 1.3420-15 region.
This, in turn, should help limit the decline near the 1.3400 mark. Some follow-up selling below the 1.3385-75 region could shift the bias in favor of bearish traders. The GBP / USD pair could accelerate the decline towards 23.6% on Fibo. level, around the 1.3320 area.
GBP / USD daily chart
Technical levels
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